Multiple Waivers Left Contractor With No Basis For Negligence Suit Against Sub

A project owner waived any and all claims against its contractor for property damages---and then went right ahead and sued for damages sustained at the construction site after a hurricane. The contractor succeeded in making those waivers stick, despite a merger clause.

New York University, NYU School of Medicine, and NYU Hospitals Center (collectively, NYU) entered into a contract with Turner Construction (Turner) to construct a new "energy building" on the Langone Medical Center campus on Manhattan’s east side. NYU covered all its bases to insure the project. Not only did it procure "all-risk" property insurance and a builder’s risk policy, but it also mandated that Turner enroll in an owner-controlled insurance policy (OCIP).

Hurricane Sandy interrupted the project in progress, flooding the site with millions of gallons of water. But NYU blamed Turner, not the storm, for allowing the water to enter the buildings---specifically, through an excavation opening the sub created. NYU claimed that "Turner’s failure to meet basic standards of care and construction techniques" and to protect site vulnerabilities resulted in "wide-ranging harm, causing NYU to suffer physical damage and business interruption."